[JdeBP]

That is not an unqualified domain name, and notice that it does not say that it is.

* http://jdebp.uk./FGA/dns-name-qualification.html

And the words that you are looking for are "resolving" and "forwarding". A proxy DNS server either does query resolution itself or forwards to another proxy DNS server that does. Both sorts can cache, so whether something is a caching server is not the distinction. dnsmasq is choosing whether to forward the query or to do query resolution itself (using a local data source) according to the number of labels in the domain name. As I said, at this level the idea of domain name qualification does not apply.

You are also mis-using "resolver", incidentally. The actual meaning of "resolver" per RFC 1034 is not what people sometimes think it to be. Avoid using "resolver". The mis-use creates confusion.

See https://news.ycombinator.com/item?id=15232208 .